"We downgrade TEVA shares to Neutral based on three key factors: 1) poor visibility on near term revenue growth drivers for the generic / branded segments, 2) heavy debt leverage (Teva has ~$36.9B of outstanding debt) which currently stands at ~5x debt/ebitda which provides the Co. little margin for error going forward, and 3) the potential for generic entry on Copaxone 40mg in 2017 – Copaxone remains a key contributor to the Co.’s sales (19% of total), and operating profits (42% of total). While Copaxone 40mg is protected by five Orange Book listed patents, we think a key US District (Delaware) Court decision is upcoming in early 2017. While the shares were down ~8% today, we think the near term risks outweigh any potential upside that might occur with this upcoming legal decision," said the analyst.

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